The Netherlands’ Central Bank Imposes a Hefty Fine on Crypto.com: A Two-Year Long Registration Oversight
The Central Issue at Hand
In May 2020, the Netherlands’ central bank, De Nederlandsche Bank (DNB), mandated that all crypto service providers must register under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act. Despite this directive, Crypto.com, also known as Foris DAX MT, chose to disregard the requirement for an extended period of over two years, from May 2020 until at least November 8, 2022. The consequences of this oversight were severe, leading to a fine of €2.85 million ($3 million) in October 2022.
Bypassing Regulations: The Implications
Although Crypto.com experienced significant growth in the Netherlands, with a substantial number of customers, their non-compliance came at a costly price. By foregoing registration and regulatory oversight, they were unable to report any suspicious transactions to the Financial Intelligence Unit-Netherlands, thereby hindering efforts in combating money laundering and terrorist financing.
A Registration Saga: Comparing Crypto.com and Binance
Despite the hefty fine, Crypto.com eventually secured its registration in July 2023. However, this development was somewhat ironic as DNB had previously stated that Dutch users could continue using the exchange while it navigated the regulatory waters. In contrast, Binance faced a slightly larger fine of €3.6 million ($3.85 million) for similar registration infringements and ultimately decided to exit the Dutch market following an unsuccessful registration attempt.
Competing in a Regulated Environment: Kraken’s Entry into the Dutch Market
Last month, Kraken, another prominent crypto exchange, obtained its fourth contact license from the DNB. This VASP registration is a crucial part of MiCA (Markets in Crypto-Assets), a set of regulations designed to regulate businesses dealing with digital assets within the contact Union. Kraken’s entry into the Dutch market, backed by the required regulatory approvals, could prove to be a significant turning point in the competitive landscape for crypto services. Currently, approximately 20% of Dutch citizens are estimated to own cryptocurrencies.
